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Benchmarked with the latest industry deal, GTL Infrastructure’s 27,724 towers would be valued at more than ₹15,300 crore, with its bids for the investor induction process likely to open in the next 7-10 days. GTL Infra, a Global Group company, is scouting for investors as part of its Strategic Debt Restructuring (SDR) plan.
GTL Infra, which is merging with another group company, Chennai Network Infrastructure Ltd (CNIL), expects a tenancy ratio of about 2.2 with 55,000 tenants as of FY18-end, as per its annual report. The company, according to sources close to the development, was expecting the stake sale to be completed by March 2018.
The company’s combined net debt (GTL Infra and CNIL) would fall to ₹3,800 crore by FY19 and this will unlock equity value of about ₹10,000-12,000 crore to shareholders, another source added.
GTL Infra and CNIL combined expect a revenue run rate of ₹2,618 crore, with an EBITDA of ₹1,352 crore, in FY18.
GTL Infra is basing its valuation on the recent American Tower Corporation (ATC) deal. On Monday, ATC announced agreements to acquire 20,135 telecom towers from Vodafone India and Idea Cellular for ₹7,850 crore. Vodafone India’s standalone tower businesses (operated by Vodafone Mobile Services and Vodafone India) had a total of 10,235 towers and tenancies of 1.52 as of June 30, 2017. Idea had about 9,900 towers with a tenancy 1.80 as of September 30.
“Though the current tenancies are 1.6 for the combined standalone tower portfolio, post the potential Idea-Vodafone merger and tenancies rationalisation, there is a potential risk of tenancies falling down to about 1.4,” a Bank of America Merrill Lynch report, dated October 25, 2017, said.
Going by a back-of-the-envelope calculation, this translates to 28,189 tenants, with ₹27.85 lakh per tenant, another source added.
Higher valuation seen Sources said GTL Infra may even attract a higher valuation as its towers were designed to host multiple tenants, compared with an operator-owned tower that may be designed to host a single captive operator.
The sources declined to be identified before an official announcement. When contacted a GTL Infra spokesperson declined to comment.
GTL Infra, which went in for an SDR in 2016, has now turned around, with its revenue increasing to ₹2,286 crore in FY17 from ₹1,008 crore in FY11.
The mandate for the investor induction process under the SDR is being run by EY, as per a regulatory filing in October.
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